Japan Post Holdings: Last-mile brand strength: a deposit base of over ¥180trn provides a unique earnings source

研报英文原文证据摘录

Japan Post Holdings: Last-mile brand strength: a deposit base of over ¥180trn provides a unique earnings source

Forecast returns

Forecast price appreciation 16.8%

Forecast dividend yield 2.7%

Forecast stock return 19.5%

Market return assumption 7.7%

Forecast excess return 11.9%

Company Description

This holding company oversees the management of group companies and operates health

management and accommodation facilities. Established in 2007 following privatization and

corporate separation, it provides a wide range of services nationwide, including postal

services, banking, and insurance. It emphasizes collaboration with local communities and

promotes highly public-oriented businesses. Strengths are a stable management foundation

and extensive networks.

Valuation Method and Risk Statement

Our price target is based on a residual income model (RIM). Risks to our view are as follows.

(1) The pace of increase in Japan's policy interest rate falling below our assumption (a total of

50bps by 2026), and (2) company guidance for FY2027 (EPS/DPS) coming in significantly

below our forecast, driven primarily by core business rather than temporary factors. Other

fundamental risk factors are as follows. Market: 1) The risk of rising interest rates on Japanese

government bonds and other holdings, and 2) fluctuations in the equity market could lead to

increased valuation losses and impairment losses for the two financial companies (Japan Post

Bank and Japan Post Insurance), thereby damaging consolidated net assets and dividend

resources. Regulatory: 1) The universal service obligation under the Act on Japan Post

Holdings and 2) the sales process for government-held shares could hinder improvements in